Week Adjourned - Part 35

Week Adjourned: 7.1.11

Top Class Actions

Best Buy BOLO a NO-GO. Best Buy got hit this week with another potential class action—another discrimination lawsuit—but this time it’s all about you —the customer…

The nation’s largest electronics retailer is facing alleged discrimination in in the form of customer racial and ethnic profiling. Ah, make that widespread racial and ethnic customer profiling in the District of Columbia and Virginia. The lawsuit was brought by an Arab American Muslim manager, Todd Abed, who was fired for protesting the practice, known internally as “BOLO”. Abed accuses Best Buy of terminating his 13-year career with the company because he objected to his district office’s “Be On the Look Out” policy (BOLO).

So, the allegations go that under BOLO, Best Buy employees circulated e-mails among all managers in the region containing images and descriptions of customers suspected of theft, intended to be posted in their respective stores. According to the lawsuit, the images and descriptions circulated under BOLO consistently involved racial and ethnic minorities who had done nothing to merit suspicion, accompanied by racially-tinged descriptions such as “bearded Middle Eastern guy who looked shady” or “black ghetto guy.” Really?

Abed, a supervisor in charge of loss prevention (read ” theft”), claims he refused to post the discriminatory emails. When this refusal became known to the district staff, they twice denied Abed promotions to General Manager—despite his being the most qualified applicant—and directed Abed’s new General Manager to trump up a reason to terminate him, according to the complaint.

The new General Manager, in turn, allegedly told Abed he would create a “paper trail” to have him fired, taunted his religion, sabotaged performance evaluations, placed him under a pretextual disciplinary “Action Plan,” and ultimately terminated him for allegedly poor performance.

The lawsuit seeks $1 million in damages and attorneys’ fees and costs. Most importantly, Abed seeks a court order permanently ending Best Buy’s customer profiling practices, which he believes continue to this day.

Top Settlements

Pond Drowning Case Settled. This is very sad. The family of a small boy who drowned in a pond while trying to save his younger brother who had also fallen in the pond, has been awarded a $30.7M settlement. The family had filed a premises liability lawsuit.

The story is devastating. Apparently, in 2001, Andrew Kennedy, who was just 11 years old at the time, tried to save his 10-year old brother James who had fallen through an ice-covered pond. Andrew drowned and James suffered severe brain damage. Andrew’s twin brother, Christopher Kennedy, claimed emotional and psychological trauma from witnessing the incident. And the parents alleged that the property owner, Lakes of the Four Seasons Property Owners Association Inc., did not have warning signs in place notifying the public of the dangers, nor did they try to restrict access to the pond. The family also claimed that Four Seasons failed to provide safety devices nearby. A cautionary tale…but at what price?

AON Account Specialists Settlement. And for all those ‘misclassified’ AON employees—justice at last. Los Angeles Superior Court judge gave final approval this week to a $10.5 million settlement of the employees overtime class action.

The story here is that California Account Specialists, whose work involves assisting Account Managers in providing insurance brokerage services to Aon’s clients, were misclassified by the defendant as exempt administrative employees. So the California Account Specialists filed a lawsuit—way back in 2007. And wouldn’t you know it, as the case was preparing for trial, the parties were able to reach a settlement. The settlement covers 534 class members, and best guess is they could have their money within 60 days.

OK. That’s it for this week. See you at the Bar.

Week Adjourned: 6.25.11

Top Class Actions

The Tailgate Crack’d? Tailgates aren’t the only thing showing cracks at Ford, it seems. Ford’s in hot water this week as it finds itself facing a consumer fraud class action. The Ford lawsuit, filed Northern District of California, seeks to represent anyone in the country who purchased certain makes and models of SUVs that have experienced damage, as in “a large crack to the tailgate of the vehicle.”

Well, that would be a little hard to miss. Apparently, or at least according to the lawsuit, Ford “knowingly and fraudulently concealed the cracked tailgate issue in connection with its sale and delivery of model 2002 through model 2005 Ford Explorers and Mercury Mountaineers, and model 2003 through model 2005 Lincoln Aviators.”

Indeed? Indeed. Indeed, according to the cracked tailgate lawsuit, although Ford knew about the problem in early-2002, the company continued to sell the affected vehicles and systematically refused to repair or replace the damaged tailgates both inside and outside of the warranty period. Umm. That could be a real pain.

So, the lawsuit alleges that Ford continued sale and delivery of these vehicles and thereby violated the various consumer protection laws of the United States and that Ford’s actions also constitute common law fraud, breach of express warranty, and unjust enrichment.

The Complaint also alleges that Ford made material misrepresentations and concealed material information regarding the design defect that caused the cracked tailgate issue. Moreover, Ford intentionally misled the public so they could continue to sell the affected Ford vehicles and avoid the expense of repair or redesign of the cracked tailgates. Go all that? Not very good for business. Not good at all, actually, if the allegations prove true.

Top Settlements

Award puts Focus on the Suffering Silent. Every once in a while a story like this makes the news and it’s sad because it takes this kind of distress before attention is paid, it seems. Recently, an elderly nursing home resident was awarded a $4.4 million settlement in a negligence lawsuit.

The short version is that in 2009, 79-year old Samuel Nevarrez was admitted to San Marino Skilled Nursing and Wellness Centre for rehabilitation after he had fallen at home several times. He stayed at the nursing home for six weeks and during that time he fell a further nine times, which, he claimed in his lawsuit, caused him to suffer a subdural hematoma and a subsequent stroke. That’s a lot of falling.

Nevarrez later returned to the facility where he suffered a further two falls and following the last fall he was placed in hospice. Nevarrez sued the nursing home and its management company, the Country Villa Service Corp, claiming that the staff at the facility did not prevent his falls. The jury hearing the elder care lawsuit found the nursing home 40 percent at fault and Nevarrez 20 percent comparatively negligent.

Medical Negligence Award puts Elder Care in Focus…Again. And while we’re on the topic, the family of an 88-year old woman who underwent treatment for a Stage IV sacral pressure sore which the family allege was negligently performed and led to their mother’s death, were recently awarded $315,000 in their medical negligence lawsuit.

It’s a very sad case. According to reports on the case, the surgery was done through Vohra Health Services, a wound care company that treated residents at the , where the woman was resident. The woman’s daughter alleged in her lawsuit, that the doctor involved negligently performed a surgical debridement because he didn’t remove all the necrotic tissue from the wound. The daughter also claimed that the surgery and post-operative care from the nurse involved led to her mother’s death. Interestingly, the counsel for the defense also blamed Miami Gardens for the worsening of the woman’s bed sore. So the woman’s family won their case.

OK. That’s it for this week. See you at the Bar.

Week Adjourned: 6.17.11

Top Class Actions

Logistical Error? Nothing like a lawsuit to improve your company’s standing—or attract quality employees—as FTDI West is about to find out. The company, located in California and Florida, got hit with an unpaid overtime class action lawsuit this week.

The gist of the lawsuit is labor code violations, well, that’s a no-brainer. Specifically, the lawsuit states that FTDI West Inc, violated: Sections 226.7 and 512 of the California Labor Code by failing to provide adequate meal breaks to employees involved, section 226.7 of the California Labor Code by failing to provide adequate rest breaks to employees involved, Section 510 of the California Labor Code by failing to pay proper overtime wages, Sections 203 and 226 (a) of the California Labor code by providing involved employees paystubs not in compliance with California law and not paying “waiting time” penalties, as well as two other causes of action as related to Business and Professions Code Section 17200 and the common law tort of unjust enrichment.

The overtime claims asserted deal with non-payment of “double time” wages. Double time wages are due for any work over 12 hours in a workday or any work beyond eight hours on any seventh consecutive day of a workweek.

The lawsuit defines its class members as “All current and former employees of Defendants who were employed as non-exempt employees at any of Defendants’ locations anywhere in California, at any time from four years prior to the initiation of this action until the present.”

Top Settlements

Drywall Might Settle but the Dust Surely Hasn’t… Remember all the defective Chinese drywall lawsuits of not so very long ago? Well, they are slowly making their way through the courts to settlement land. Case in point—Banner Supply has agreed a $54.4 million settlement of a class action lawsuit brought by homeowners in the Orlando, FL area. In fact, the agreement covers 2,000 to 3,000 homes south of Orlando.

According to Builderonline something like 95 companies have been implicated as distributors of the sulfur-tainted drywall and named in subsequent lawsuits filed against the Chinese manufacturers. The defendants are accused of being the source of tainted drywall. While Banner Supply tops the list, others suppliers reportedly include ProSales L&W Supply, ProBuild, Stock Building Supply, and 84 Lumber.

While $54.5 million might seem a large settlement, it may only work out to between $18,000 and $24,000 per home, and estimates suggest the cost of repairing the affected properties could reach $100,000.

Defective Boat Injury leads to $31M Award. Ok. There’s bad design, and BAD DESIGN. In this case, I’m not talking about an infraction of the Home & Garden variety, but rather something that warranted a $31 million award. Two women brought a defective product and personal liability lawsuit against MasterCraft, after suffering some pretty horrendous injuries that good design likely would have prevented.

Short version, in 2006 Nichollette Bell and Bethany Wallenburg were among 12 passengers riding in a MasterCraft X-45 wakeboarding craft. They were sitting on the bow of the boat when it was suddenly submerged as the driver of the boat went to retrieve a fallen wakeboarder. As a result the women were swept off the boat by the force of water and into the lake. The boat’s propeller struck Bell on the head, ripping out an eye and leaving her with brain damage. The propeller also slashed Wallenburg’s left elbow and lower back, resulting in muscle and nerve damage. In their lawsuit, the women alleged the boat was defectively designed. They also alleged the driver handled the boat negligently. Not surprisingly, the jury found MasterCraft 80 percent at fault and the driver 20 percent at fault.

OK. That’s it for this week. See you at the Bar.

Week Adjourned: 6.11.11

Top Class Actions

Never mind what’s in your wallet…Capital One could be more concerned with what’s left in theirs soon, as it seems they may have been doing a little corporate pick pocketing… it’s very popular these days. A lawsuit seeking class action status was just filed alleging Capital One (NYSE:COF) misrepresented its “Transfer Balance Program” program, resulting in higher-than-expected interest rates for consumers.

The case, filed June 9, 2011, in the United States District Court for the Eastern District of Michigan, alleges that Capital One deceived cardholders by claiming that a cash advance obtained through the company’s transfer balance program would include a 0 percent Annual Percentage Rate (“APR”) for one year. The company also allegedly promised that credit balances on regular monthly purchases (“purchase balances”) would incur no interest as long as the balance was paid within 25 days.

However, according to the complaint, cardholders who took advantage of the transfer balance program were charged interest rates exceeding 13 percent on their purchase balances, even if the balance was paid on time, because payments were applied to the transfer balance rather than to the purchase balance.

The lawsuit alleges that Capital One’s actions constitute a breach of contract and the duty of good faith and fair dealing, in addition to violations of the Virginia Consumer Protection Act and the Michigan Consumer Protection Act. The case also argues that Capital One received unjust enrichment through the alleged scheme.

Ah yes, unjust enrichment…that old chestnut. Seems it never grows old.

Top Settlements

One for the Madoff Meter… While we’re on the subject of things financial—a settlement was recently reached between a group of investors and HSBC Holdings PLC, with Europe’s largest bank agreeing to pay $62.5 million to the investors, who allegedly lost money in association with a Madoff securities fraud.

It seems that the investors had placed funds with Ireland-based Thema International Fund Plc, the assets of which were held with Bernard L. Madoff LLC, according to a statement by HSBC. Bloomberg reports “Thema Fund, a so-called Madoff feeder fund, was controlled by Bank Medici AG. Bank Medici with its founder Sonja Kohn is part of a $59 billion suit by the trustee liquidating Madoff’s firm.” This has to be one of the worst trustee jobs in history, I would think.

Reportedly, Thema was one of several funds placed in the custodianship of HSBC units, which subsequently funnelled monies to Madoff. The settlement is pending court approval.

A statement issued by HSBC stated that the settlement “shall in no way be construed” as an admission of fault. HSBC still faces other Madoff-related lawsuits in other countries including Germany, and Luxembourg. It’s the never ending story. 

And it’s a victory for the Ladies. A federal judge in Washington has approved a $32 million settlement of a class action brought against Wells Fargo Advisors by a group of women who alleged gender discrimination.

Reportedly, some 3000 female financial advisors make up the class. The suit was filed in 2009 by three female financial advisors who worked at Wachovia Securities. According to a report in the Wall Street Journal the women claimed that compared with their male counterparts, female advisors were provided fewer business opportunities by the company. The women also claimed that female advisors were at a disadvantage in other ways, specifically with respect to career advancement, work assignments and distribution of accounts.

The class covers all women who were employed as financial advisors by Wachovia or Wells Fargo at any time between March 17, 2003, and January 25, 2011, which is the date a preliminary approval was reached. The class also covers women who were employed by Wells Fargo Investments LLC and women who were employed as advisors by Prudential Securities Inc. or A.G. Edwards & Sons Inc. as of the dates those companies merged with Wachovia. I wonder who’s next?

OK. That’s it for this week. See you at the Bar.

Week Adjourned: 5.20.11

Top Class Actions

AXA axing pay? Pay—overtime, regular time, anytime in fact that requires payment is a recurring theme in class action lawsuits. This week, thousands of commissioned US employees at global financial giant AXA filed a potential class action against the company alleging they worked as many as 60 hours a week, but weren’t paid minimum wage or overtime.

Because this is apparently a long-running problem—the suit alleged the violations go back as far as 2005 —the potential class could consist of more than 1,000 current and former employees: from the company’s financial product marketers and financial product marketer trainees to cold callers, according to the suit.

Employees of the company were paid a $24,000 base salary plus a percentage share of any commissions earned by licensed brokers, if they were successful in obtaining new accounts for the brokers, according to court papers. So, maybe we’ll pay you—but you can put in the hours anyway? Am I reading this correctly? Failure to pay overtime violates the U.S. Fair Labor Standards Act, (FLSA) which covers employees paid commissions.

One employee, Bennet Marcus, of New York City, worked from 8 a.m. to 8 p.m. five days a week and was unpaid during his training, according to the suit. He worked for AXA from October 2010 through February 2011 as a trainee and cold caller. Where’s Charles Dickens when we need him?

FYI—AXA is one of the world’s largest insurance companies with 2010 revenues of 91 billion Euros—$129 billion. In case you’re having trouble calling the company to mind—their popular TV commercials feature a 900-pound gorilla–that’s him above. No small irony there.

The suit, which requests a jury trial, seeks unspecified back wages and overtime, damages, interest, attorney fees and costs. In addition to the claims under federal law, the plaintiffs also are seeking damages for underpayment of wages under New York State law for AXA’s workers in New York.

Top Settlements

From unpaid overtime to retirement…it’s all about employees. This week a federal judge approved a $30 million settlement ending a 5-year old ERISA class-action filed against Duke Energy.

The lawsuit, brought by 20,000 class members who worked for Duke Energy Corp, alleged the company broke federal law when it changed its retirement plan. Now why would they want to do that?

According to the Greenville News, Duke workers said the Charlotte, N.C., company violated the Employment Retirement Income Security Act of 1974 in how it administered and calculated benefits under its retirement cash balance plan. A penny saved is a penny earned—not a penny pinched.

UMB made the most of his weekend? UMB Financial Corp, has agreed to pony up $7.8 million in settlement monies, potentially ending the class action lawsuit brought against it in April 2010. The suit alleged that UMB Bank, a subsidiary of UMB Financial Corp, unfairly charged overdraft fees by treating pending deposits differently than pending withdrawals, thereby rearranging withdrawals to maximize overdraft fees.

By way of example, David Johnson who filed the suit, claims that UMB charged him 17 overdraft fees, each in the amount of $36, over a single weekend. This included a $36 overdraft fee on a eighty-five cent purchase. UMB then charged Johnson additional overdraft fees and negative balance fees after these 17 fees depleted the hundreds of dollars of available funds in his account.

Nice! That’s certainly putting your customers’ needs first.

The settlement, subject to approval by Jackson County Circuit Court, includes no admission of wrongdoing. Of course it doesn’t. But money talks.

That’s enough good news for one week. See you at the bar.

Week Adjourned: 5.13.11

Top Class Actions

Put your paycheck on a diet? These women don’t think it’s a such a good idea. Two Long Island women who worked for Jenny Craig filed a unpaid wages class action lawsuit, alleging that the well-known weight-loss chain put their paychecks on a diet.

The women, in a suit filed May 10 In New York State Supreme Court in Manhattan, claim that Jenny Craig Operations Inc., the Carlsbad, Calif.-based chain owned by multi-national food giant Nestlé’s, improperly shortchanged them by a 1/2 hour a day for every shift they worked, even though they worked during their 30-minute break times. The alleged underpayments violate New York’s labor laws, according to court papers.

The suit, which seeks class action status, was filed by Tammy Weinstein, of Bellmore, who has been a program director and weight loss consultant since November 2002 at Jenny Craig locations in Valley Stream and Massapequa, and by Melissa Pallini, of Holbrook, who was a weight loss consultant, program director, part time receptionist, and stocker from June 2008 until June 2010 at the chain’s East Patchogue location.

The suit seeks to represent all New York employees of Jenny Craig who worked as weight loss consultants, receptionists, stock persons, program directors and any other employee at Jenny Craig weight-loss centers. According to court papers, the class included more than 500 people who’ve worked at Jenny Craig since May 2005. The chain has 30 locations statewide, 10 of them on Long Island, in Centereach, E. Patchogue, Great Neck, Farmingdale, Freeport, Hicksville, Huntington Station, Massapequa and Valley Stream.

The employees worked about 15 to 35 hours a week on shifts of five to eight hours one day to five days per week, according to court papers.

Jenny Craig, a commercial program that features portion-controlled, prepackaged meals supplemented by store-bought vegetables and fruit, received top marks this week from Consumer Reports for diet success. The chain offers support through weekly counseling sessions.

The diet chain’s celebrity spokespersons have included actress Kirstie Alley, Valerie Bertinelli, Queen Latifah, actresses Sara Rue and Nicole Sullivan, actor Jason Alexander and, since January, actress Carrie Fisher.

Top Settlements

Where there’s smoke, there’s gas… This is certainly an interesting twist on an old theme. A Flordia judge recently ruled in favor of the plaintiffs in litagation over defective Chinese drywall. The Hillsborough County judge, Robert Foster, ruled that homeowners’ insurance should Continue reading “Week Adjourned: 5.13.11”

Week Adjourned: 5.6.11

Top Class Actions

Reel, er Real, Life Conspiracy Theory. So who knew? It’s an interesting twist on antitrust. Siddharth Hariharan, a former software engineer at Lucasfilm and founder and CEO of InEarth, filed a class action lawsuit this week alleging that several of the nation’s leading high-tech companies violated antitrust laws by conspiring to fix the pay of their employees and entering into “No Solicitation” agreements with each other. That’s kind of like a union for employers… maybe.

Hariharan is looking for restitution for lost compensation and treble damages for the anti-competitive employment practices of Adobe Systems Inc. (ADBE), Apple Inc. (AAPL), Google Inc. (GOOG), Intel Corporation (INTC), Intuit Inc. (INTU), Lucasfilm Ltd. (creators of Thrillville, at left), and Pixar. No small request there.

But Hariharan points out, “My colleagues at Lucasfilm and I applied our skills, knowledge, and creativity to make the company an industry leader. It’s disappointing that, while we were working hard to make terrific products that resulted in enormous profits for Lucasfilm, senior executives of the company cut deals with other premiere high tech companies to eliminate competition and cap pay for skilled employees.”

The complaint contains quite a laundry list of allegations, specifically conspiracy among defendants consisting of (1) agreements not to actively recruit each other’s employees; (2) agreements to provide notification when making an offer to another’s employee (without the knowledge or consent of that employee); and (3) agreements to cap pay packages offered to prospective employees at the initial offer.

Short back story, “starting in 2005 with Lucasfilm and Pixar, and continuing until at least 2009 with all defendants, the companies entered into “No Solicitation” agreements with knowledge of the overall conspiracy and with the intent to reduce employee compensation. As additional companies joined the conspiracy, competition among participating companies for skilled labor decreased. Compensation of defendants’ employees was less than what would have prevailed in a properly functioning labor market where employers compete for workers.”

But this is more than just conspiracy theory—the complaint for damages follows an investigation in 2010 by the United States Department of Justice into similar misconduct by defendants. After that investigation was made public, the defendants agreed to end the anticompetitive agreements. However, no compensation was provided to employees of defendants. This class action was filed to seek lost pay for the employees who were targeted by defendants’ conspiracy. ‘Sorry’ doesn’t pay the mortgage, after all.

Top Settlements

Cooking with gas—to the tune of $40 million—the California Culinary Academy has reached a settlement of a class action lawsuit brought by students of the CAA over allegations of false advertising. Specifically, the suit charged that the school “misrepresented its 98 percent job placement rate, exaggerated its prestige in the industry and suggested that it had a selective qualifying process.” 98% job placement—in this market? Really?

While the settlement is pending approval, if its green lit, some 8,500 students who attended the CCA between 2003 and 2008 may be eligible for rebates of up to $20,000 each. (It didn’t cost me that much to learn to cook—wonder what I skipped?)

Plumb Deal, Finally? For all you who suffered plumbing woes thanks to Kitec, you will be interested to find out, if you don’t already know, that a preliminary settlement for both the US and Canada is in the works. In a joint announcement between the courts in the US and Canada this week, the parties concerned said they have entered into an agreement to settle class actions alleging that the Kitec Plumbing System manufactured by IPEX may be subject to premature failure and otherwise may not perform in accordance with the reasonable expectations of users.

The settlement relates to systems sold under various brand names, including Kitec, PlumbBetter, IPEX, AQUA, WARMRITE, Kitec XPA, AmbioComfort, XPA, KERR Controls and Plomberie Amelioree. The settlement covers class members throughout the U.S. and Canada.

Because this is a class action settlement, the agreement has been preliminarily approved by United States District Court Judge Royal Furgeson on April 29, 2011. Ontario Justice Terrence Patterson and Quebec Justice Jean-Francois Émond will consider preliminary approval in May 2011.

The settlement agreement provides a Settlement Fund and Claims Process for those who file claims related to any structures they own, have owned, lease, or have leased that contain a Kitec System. The amount paid per claimant depends upon the type and extent of any possible failure, the size and type of Kitec System and its installation, and the available funds in the Settlement Fund.

FYI—you can find out who to contact to get more information on this—in the US and Canada—by reading our post on the Ipex Kitec settlement.

And that’s it for this week. See you at the bar.

Week Adjourned: 4.29.11

Top Class Actions

DIRECTTV in Direct Line of Fire over alleged dodgy business practices. A lawsuit by DIRECT TV customers who were illegally charged “early cancellation penalties”—fees of up to $480—has been granted “class action” status by a California court, potentially leading to millions of dollars in refunds.

FYI—DIRECTTV is the largest satellite TV provider in the US with over 16 million customers. Doesn’t take a rocket scientist to figure out that even a portion of that number of plaintiffs could translate to a rather large settlement.

The suit, filed in September 2008, was certified April 22, 2011, on behalf of DIRECTTV customers who were charged a cancellation penalty when they cancelled service. DIRECTTV applied its unlawful penalty provision to all of its customers including, in some cases, customers who terminated because the satellite equipment stopped working or they were no longer able to receive service when they moved.

In other cases DIRECTV would unilaterally extend a consumer’s “programming commitment” by a year or two if malfunctioning equipment needed to be replaced or the customer decided to upgrade receivers and then charge the fee if the customer stopped service after that. In some cases, according to the suit, DIRECTTV took the fees from their customers’ bank or credit card accounts without their permission.

Did any of this happen to you?

Top Settlements

Insured now Assured. Here’s a happy ending to a rather nasty insurance scam. National Western has agreed to pay more than $17 million to settle a class action lawsuit it faced over allegations that it targeted senior citizens—unfairly.

Short version—the suit alleged that National Western set up an unlawful group annuity policy that was issued through an out-of-state group created by National Western, and that the Continue reading “Week Adjourned: 4.29.11”

Week Adjourned: 4.22.11

Top Class Actions

Copping out on COBRA? Brunel Energy Inc and Brunel Energy Group Health Plan got hit with a class action this week. It was filed on behalf of current and former participants in the Brunel Energy Group Health Plan (“the Plan”) who allege Brunel failed to provide health care coverage continuing health care coverage (commonly called COBRA coverage) to employees and their beneficiaries who were covered under the Plan through an insurance policy with BUPA International.

According to the complaint Brunel did not notify employees of their entitlement to COBRA coverage or of their right to obtain coverage at a reduced rate as authorized by Congress in its recent economic stimulus package.

According to the Complaint, when asked for a COBRA package by a terminated employee, Brunel advised the former employee that COBRA coverage was not available. Even after being notified by the U.S. Department of Labor that the former employee was entitled to elect COBRA coverage at the statutorily reduced rate, the Complaint alleges that Brunel did not offer the coverage. Would this come under the heading of ‘cost savings’?

The Complaint seeks an injunction requiring Brunel to bring its health care plan into compliance with the law and an order requiring Brunel to reimburse former employees and their beneficiaries for certain health care costs they would not have incurred had they been allowed to elect COBRA coverage. Wait—there’s more—the complaint also seeks civil money penalties of up to $110 dollars a day for Brunel’s failure to provide statutory notices describing the Plan and apprising employees and their beneficiaries of their COBRA rights as required by law.

Top Settlements

Don’t Mess with our Vets. JP Morgan Chase was all apologies this week, on the back of a settlement reached with its customers who are or were military personnel, who had filed a class action against the bank alleging that it was wrongly foreclosing on families of service personnel and overcharging them on their mortgages to boot. Does that come under the definition of ‘free market economy’? (don’t get me started on that one)

Well, it obviously did in JP Morgan’s version. But, in February, a J.P. Morgan executive apologized at a U.S. House hearing on its behavior. Then they rolled out a series of programs to help active members and veterans—programs including educational initiatives. And, they said that the bank would no longer foreclose on any currently deployed military personnel. How generous of them.

The financial protections that the suit sought to have reinstated are in fact afforded US military personnel under the Service members Civil Relief Act (SCRA). So, maybe it wasn’t just an attack of conscience on JP Morgan’s part.

In any event, Reuters reported that under the terms of the settlement “J.P. Morgan said it will pay $12 million to the class-action suit and set aside $15 million for additional damages on a case-by-case basis. Any unused funds will be used to benefit a charity selected by the U.S. military.” (Reuters.com)

Baby Brain Food? Guess Not. If you got duped into buying an expensive brand of infant formula—Enfamil, made by Mead Johnson & Co—you may be pleased to know they’ve reached a preliminary settlement in the class action they were facing concerning allegations of false advertising.

The suit claimed that Mead falsely represented that Enfamil LIPIL is the only infant formula that contains DHA and ARA—fatty acids it claims are “clinically proved to improve brain and eye function in infants.” Are you kidding? If that really were the case they’d be putting that stuff in the tap water.

If the settlement is approved, people who purchased Enfamil LIPIL formula for six months or less between October 13, 2005 and March 31, 2010, can file a claim to receive either one 12.5 oz container of Infant Formula or $6 in cash.

For those folks who purchased Enfamil LIPIL formula for more than six months between October 13, 2005 and March 31, 2010, you can file a claim to receive either two 12.5 oz containers of Infant Formula or $12 in cash. You can find out if you’re eligible to be a class member here.

Ok. That’s it for this week. See you at the bar.

Week Adjourned: 4.8.11

Top Class Actions

HAMPered Loan Modifications? It seems there’s no end in sight to the mortgage crisis—with new twists and victims appearing regularly. In fact, you could argue that it’s spawned a whole spin-off industry of fraud, and related legal actions. For example, this week, Saxon Mortgage Inc, the mortgage service division of Morgan Stanley, was hit with a potential class action lawsuit over allegations that the company uses the Homeowners Affordable Modification Program (HAMP) to attract customers into making “trial” payments on loans it has no intention of ever permanently modifying.

Filed in Northern California, the suit alleges a pattern of misconduct by Saxon which involves collecting trial payments, delaying the processing of loan modifications, and then denying the application altogether for demonstrably false reasons. Where do you start?

The suit’s lead plaintiff, a small business owner in San Francisco, Marie Gaudin, had, like millions of Americans, fallen on hard times as a result of the recession and approached Saxon for a loan modification on her home. Long story short, she was directed to Saxon’s “Home Preservation Department” and subsequently asked to provide extensive documentation of her financial condition, which she did. She received a written agreement from them that appeared to promise a permanent HAMP loan modification after she made three “trial” payments as proof she could handle the loan repayments. But—Saxon didn’t honor its agreement. Are we surprised?

The suit claims that Saxon delayed the processing of the HAMP loan modification, while Gaudin continued to make trial payments, which were duly noted as received in correspondence from Saxon. Nevertheless, Saxon denied her a permanent HAMP modification. According to the suit Saxon claimed that Gaudin had failed to make payments or comply with document requests. They also allegedly claimed that she did not make payments, while in the same letter actually acknowledged that she was current on all payments (do they not read their own correspondence before it goes out?). Saxon also claimed that the U.S. Treasury Department was involved in reviewing HAMP applications. Who gets paid to think this stuff up?

Not surprisingly, the suit alleges that Saxon’s breach of contract, rescission and restitution, and deceptive debt collection practices violated California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act), and fraudulent, unlawful, and unfair business practices under California’s Unfair Competition Law (UCL).

Top Settlements

Goodyear Discrimination Suit Settles. Here’s a good news story—we like those. A jury in Cumberland, NC recently awarded Lashanda Shaw $450,000 as settlement of her wrongful termination suit against Goodyear Tire and Rubber Co.’s Fayetteville plant this week.

Court documents reportedly state that Shaw was fired for making a complaint about racial and sexual discrimination in the workplace. She filed her suit in 2009. When she finally got to court the trial took five weeks with the jury unanimously agreed on the compensatory damages. I’ll bet she’s sleeping better now.

May be Justice—but at What Cost? A 79-year old woman in Scranton, PA was awarded $550K this week as settlement of her medical malpractice case. But here’s the downside—Irene Doherty filed the suit because she suffered a 23-month delay in the diagnosis of her lung cancer. The verdict was returned against radiologist Earl Detrick, who practiced in Scranton and Wilkes-Barre, PA, prior to retiring.

Ms. Doherty’s lawyers argued that Detrick failed to properly report to Doherty or her physician his conclusions regarding a computerized tomography (CT) scan of her chest. That’s helpful. It turns out that that scan revealed a mass in Doherty’s right lung that required medical follow-up—but it wasn’t brought to Ms. Doherty’s attention until nearly two years later when she underwent a subsequent CT scan of her chest. The second scan revealed a much larger cancerous mass. So, in the 23 months between CT scans, the mass had doubled in size, and was inoperable. Worse, the cancer had spread to Doherty’s lymph nodes. Frankly, I find this astonishing—how does this kind of oversight happen?

Needless to say, Doherty’s suffering and physical deterioration due to her lung cancer could have been prevented had the radiologist done his job—which was to report the results of the January 2007 CT scan as soon as he saw them. And that’s exactly what her lawyers argued. If nothing else Doherty’s case emphasizes the importance of being your own advocate when it comes to healthcare. Don’t get me started…

Ok. That’s it for this week. See you at the bar.